Housing Estate Joint Venture near Paradise Lost.

This housing estate is located near Paradise Lost, off Kiambu road, just after Runda.

The land size is 40 acres.

Assuming a land value of kes 40m per acre, the total contribution from the land owner is kes 1.6 billion.

The land can hold 280 luxurious housing units , each sitting on a 1/8th acre plot. The neighborhood is dotted with high cost stand alone maisonettes such as KCB Pesnsion housing, Runda Paradise and Mhasibu sacco housing estates, which sell at a minimum of kes 25 million per unit.

Total cost of the Project.

The project costs, inclusive of land, construction cost, infrastructure costs, architectural , engineering and quantity surveying fees, bank interest, marketing costs is kes 6 billion.

Land owner’s share.

Out of the 280, units, 89 units will go towards compensating the land owner while the remaining 190 units go towards the cost of construction and joint venture financier share. This represents a share of 32% going towards the land owner in the joint venture agreement.

The Joint Venture financier will have a share of 32 units. In most cases, the joint venture financiers sell off their units. The land owner can choose to rent out or sell off their units .

Comparison between Joint Venture and Outright sale.

A joint venture project usually takes a minimum of 1 year for the 1st phase to bring in an income. Outright sale takes between 6months to 1 year to find a buyer.

The total profit accrued from the joint venture is kes 2.5 billion for the land owner as take home amount. The total profit accrued from outright sale is kes 1.6 billion. Therefore, joint venture option enables the land owner to increase their profits by 56%,representing an increase of over kes 900 million shillings.

Architect Francis Gichuhi Kamau.

info@a4architect.com